Forex Exchange Rates

The Forex exchange rates of the currencies being traded in a Foreign Exchange Market, or Forex, is the backbone of any of this type of market. Traders make their living or make their profits through the rise and fall of the Forex exchange rates of the currencies that they buy and sell or as more aptly called, exchanged. That is because in the Forex, there is really no buying and selling of currencies (it was just a concept for easier understanding), but in reality, currencies are just exchanged.

It is through this exchange of currencies that traders make their actual profits. For example, a trader buys a currency that is worth 1 US dollar. When the Forex exchange rates move and it moves almost by the hour because it is one of the most volatile markets in the world, then that currency may then now be worth 2 US dollars. When the trader sells or exchanges his currency, the difference between the original Forex exchange rate of the currency and its rate at the time of the exchange is the amount of profit that the trader gained.

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